Baidu Invests $10 Million in IndoorAtlas for Mapping

Baidu Inc. is investing about $10 million in U.S. startup IndoorAtlas Ltd. to expand mapping services inside buildings and shopping centers, a person familiar with the matter said. Photographer: Brent Lewin/Bloomberg

Baidu agreed to invest in mapping company IndoorAtlas Ltd.,
which allows users to find their way through malls and office
buildings, the companies said today. The search operator also
unveiled a headset that can delivers product information to
shoppers and a mobile service that makes it easier for consumers
to find nearby businesses.

The company’s billionaire founder Robin Li is adding the
functions to help sell more advertising by connecting mobile-phone users with brick-and-mortar businesses. The move comes
days after Baidu formed an online shopping venture Dalian Wanda
Group and Tencent Holdings Ltd., Asia’s biggest Internet
company, intensifying the rivalry with Alibaba.

“The mobile Internet has given us new possibilities and
opportunities,” Li said at the Baidu’s annual developers
conference in Beijing today. “Mobile not only presents many
opportunities for Internet companies, but also for participants
in traditional industries.”

IndoorAtlas is the world’s first location service using
magnetic anomalies inside buildings to pinpoint indoor
locations, with results that are accurate to less than three
meters, or about 10 feet, according to its website. Baidu
invested $10 million in the Finnish company, valuing it at about
$40 million to $50 million, a person familiar with the matter
said, asking not to be identified as the details aren’t public.

New Products

Baidu’s American depositary receipts climbed to $224.80
yesterday in New York, rallying the most since July 25, after
Bloomberg News reported the investment. The Bloomberg China-US
Equity Index added 0.6 percent yesterday.

Businesses such as restaurants or movie theaters stand to
benefit as mobile Internet applications make it easier for
consumers to discover what’s nearby, Li said.

The mobile Internet is also prompting companies to make it
easier for users to input information without typing. About 10
percent of searches now are done using voice recognition
technology, according to Li. Within five years voice and image
recognition will account for about half, as users take advantage
of simpler interfaces, he said.

Headset Shopping

BaiduEye, the company’s new headset, has a camera that
wraps around the side of a users’ head and can identify products
and provide information about them through an earpiece or
smartphone. The hardware doesn’t include a display.

“This is like an extension of your eye, a third eye or
second brain,” the system’s designer Gu Jiawei said in an
interview. “For us, the shopping mall is the most attractive
scenario. Consumers can see what a product is and get online
comments.”

The Baidu Connect service, which started today, allows
merchants and restaurants to register and set up an account that
makes it easier to reach customers and offer location-based
services, Li Mingyuan, Baidu’s vice president for mobile, told
the conference. Once the account is created, that presence
becomes integrated across Baidu’s offerings such as search and
maps, so businesses can offer promotions and discounts.

IndoorAtlas was founded in 2012 as a spinoff from the
University of Oulu, Finland. The company was incorporated in the
U.S. with an office in Mountain View, California, last year. It
also has research and development centers in Oulu and Oxford,
England.

Mobile Traffic

Baidu is investing in mobile applications to capture rising
Web traffic on smartphones and tablet computers. The venture
with Wanda plans to target the “online-to-offline” segment,
directing mobile Web users to nearby shops and restaurants,
Wanda Chairman Wang Jianlin said last month.

That’s also an area where Alibaba, China’s biggest e-commerce operator, is seeking to expand. In March, Alibaba
agreed to buy a stake in Intime Retail Group Co., owner of
department stores and supermarkets, as the company integrates
online and offline shopping.

Alibaba in July acquired AutoNavi Holdings Ltd. in a deal
that valued the company at $1.5 billion to bolster its Internet
mapping tools as it plans an initial public offering and listing
on the New York Stock Exchange.